Project Summary/Abstract Diseases affecting the lung parenchyma or alveoli cause significant morbidity and mortality in the US today. Treatments for these diseases are often ineffective and the development of novel therapeutics is hampered by an incomplete understanding of disease pathogenesis due in part to an inability to access living alveolar cells from patients. The derivation of an inexhaustible supply of patient-specific alveolar epithelial cells would allow studies of disease pathogenesis in primary cells carrying each patient?s entire genetic background, and consequently the development of new therapeutics. This application proposes to renew a long-standing project focused on the in vitro derivation of lung epithelial lineages from patient-specific induced pluripotent stem cells (iPSCs). In this renewal we generate an inexhaustible source of functionally mature alveolar epithelial type 2 cells (AEC2s) from iPSCs that we have engineered by reprogramming patient blood or skin specimens. Employing iPSCs generated from children and adults with interstitial lung diseases that arise from heterozygous mutations in surfactant genes, we propose to model the onset of a currently untreatable parenchymal lung disease at its inception, an event that likely begins with AEC2 dysfunction initiated by toxic-gain-of function effects of misfolded proteins. Through three aims we test the hypothesis that AEC2s generated from patient specific iPSCs carrying surfactant pathway mutations exhibit surfactant protein mistrafficking which leads to disrupted proteostasis, a late block in autophagy, broad alveolar progenitor dysfunction, and inflammatory activation.